Real Name Checks On Weibo Won't Come Cheap For Sina, Tencent

With it now certain that China’s popular Weibo (microblogging) services – prime among them being Sina’s (NASDAQ:SINA) and Tencent’s (HKG:0700) – will have to implement real-name ID checks in the coming months, it appears that the system will not come cheap.

Indeed, each single online check of a user’s name and national ID number will cost a rumored 2 RMB (US$0.20). And so for Sina (NSDQ: SINA) and Tencent, the government-mandated checks could end up costing them hundreds of millions of RMB for their 250 to 300 million Weibo users.

But it was never going to come free. And it raises the complex issue of potential government ties to the company, called id5, that will process these real-name checks. That little-known company will be the prime beneficiary of these sixteen new regulations for microblogs. It is the government that charges the fee, but it’s id5 that will handle all the processing.

Sohu (NSDQ: SOHU) IT reports that the Beijing-based Time (NYSE: TWX) Weekly newspaper has tried repeatedly to question staff at the mysterious id5 about this, but journalists have been turned away.

If, say, 75 percent of Sina’s 250 million Weibo users turn out to be real people or companies – i.e. not spammers or zombie accounts – who wish to continue using the service, then all those checks would cost Sina a total of 375 million RMB (US$59 million).

Being Held Accountable For Your Tweets

The official line is that the real-ID clampdown will help stop false rumors (and maybe spam as well) spreading via the numerous Twitter-like services. But other analysts fear it’s a move to suppress free speech on these lively and increasingly popular sites. (Note that microblog users can still use cutesy and wacky nicknames – but Sina, Tencent, Netease (NSDQ: NTES) (NASDAQ:NTES), and all those other operators, will have every user’s actual name and number on file).

These charges have been levied before, and industry insiders believe that Baidu (NSDQ: BIDU) (NASDAQ:BIDU) had to pay up for its (failed and shuttered) microblog, Shuoba – but that the search engine giant ended up paying more than the rumored 2 RMB that it’ll cost in 2012. It’s not clear if the real-name requirement deterred users, or if Shuoba simply failed to take off because it arrived too late to be a contender.

Sina’s and Tencent’s shares have been stable since the new regulations were outlined on December 16th – but the full pain of implementation has not yet begun. It will be costly for the companies, and could drive some users away from using any Weibo platform.

Follow this developing issue on our ‘real-name’ tag as it becomes mandated on other areas of the Chinese web as well.